Corporate Banking

Landsbankinn is a dynamic force in society and takes its role seriously. The Bank is a trustworthy financial partner and strives to offer exceptional solutions and services in finance.

Fara neðar
The Icelandic economy prospered in 2018, as in recent years. The growth phase was in its eighth consecutive year and the economy scores high on most indicators. Towards the end of 2018, there were some signs of slight cooling.

Solid corporate banking services

Landsbankinn’s share in the corporate market is very strong, measuring 34% on an annualised basis in 2018 in Gallup’s surveys. This is slightly lower than at year-end 2017 (34.8%) yet overall, the Bank’s share in the corporate market has grown in recent years.

Total lending to corporate customers increased somewhat in excess of expectations in 2018, mostly due to several large projects the Bank participated in financing. Landsbankinn's share in loans to corporates remains the largest of the three commercial banks, or 40.6%*. Landsbankinn’s credit portfolio has grown most through loans to the fisheries and seafood sector, and also to trade and service companies. Around the middle of the year, construction and real estate development cooled slightly and this trend is deemed likely to continue. The explosive growth of the travel industry also slowed somewhat and the sector is now placing increased emphasis on achieving efficiencies and consolidating for the future. Several large trade and service companies merged in 2018.

Emphasis on good service and development of digital solutions

Landsbankinn’s robust corporate banking services throughout Iceland provide companies of all sizes and in all sectors with exceptional service. Landsbankinn also places a great deal of emphasis on developing self-service solutions and improving online banking. More information about new digital service solutions is provided in the chapter on Development in Banking Services.

The focus on robust and good service, effective communication with and disclosure to companies resulted in increased satisfaction among corporate customers, according to Gallup’s surveys. Gallup’s surveys also revealed the pleasing news that were companies to select a commercial bank today, many more would choose to bank with Landsbankinn than are currently customers.

*According to the banks' annual financial statements for 2018. Updated once the annual financial statements for all the banks had been published.
Share in the corporate banking market
Source: Gallup

Market share in corporate lending*

*According to the banks' annual financial statements for 2018. Updated once the annual financial statements for all the banks had been published.


Landsbankinn’s Corporate Banking Service Centre, which services small and medium-sized enterprises in the capital region, has operated out of Borgartún 33 since 2014. The service provided by the Centre has grown more comprehensive and robust year by year. The Corporate Banking Service Centre employs knowledgeable account managers who handle companies in the capital region and elsewhere. Borgartún 33 also houses a Landsbankinn branch, Vehicle & Equipment Financing and Landsbréf hf., Landsbankinn’s subsidiary.

360° corporate consultations

In late 2017, Landsbankinn began offering 360° corporate consultations which consist of a review of the operation and future strategy of each company, its needs and the ways in which Landsbankinn can help it achieve its goals. The experience gained in the first set of consultations was used to change and improve the service and presentation of it began in earnest in 2018. It is fair to say that the 360° corporate consultations were well received. The consultations are tailored to the needs of the owners and management of small and medium-sized enterprises and are offered to all corporate customers of Landsbankinn. In 2018, the leaders of around 400 companies availed themselves of the consultation service and were well pleased.

360° corporate consultation in 2018


Continued growth in construction financing

Landsbankinn has over the course of many years been a leader in construction financing. In recent years, the Bank has extended this leadership to funding of new residential apartments and hotels. There has been great demand for residential housing in recent years and the Bank has funded many contractors active in the construction of residential housing.

At the end of 2018, larger construction projects financed by the Bank numbered 103, managed by 71 contracting firms. There were 8 hotel construction projects and 5 involving commercial housing. Construction projects involving new residential housing were by far the most numerous, with a total of 90 such undertakings, financed by Landsbankinn, in full swing at the end of the year.

These projects involve the construction of 3,960 apartments, most of which will enter the real estate market in 2019 and 2020. 570 of these apartments are rental apartments such as student housing and for the general market, i.e. owned by non-profits. The lion's share of these apartments are located in the capital area, with some larger projects also in Selfoss, Akranes and Reykjanesbær. Large construction projects are expected to grow less frequent in the near term.

Large construction projects with the Bank’s involvement


Residential apartments financed by Landsbankinn*

*Most entering the market in 2019 and 2020

General residential apartments financed by Landsbankinn


Strong partner of the travel industry

The travel industry is now the industry that accounts for the most FX earnings in Iceland. Landsbankinn has supported the growth and development of the sector through its rapid growth phase in recent years.

Landsbankinn currently finances 8 hotel construction projects, incorporating 540 hotel rooms, scheduled to open in 2019 and 2020. Six of the hotels financed by the Bank are located in the capital region; two outside the capital area. The growth in tourist arrivals to Iceland has declined somewhat yet the hotel occupancy rate remains high, especially in the summer months.

The Bank has shown willing to participate in sound development projects within the various fields of the travel sector, such as entertainment, vehicle rental and group transport. ITF I, a dedicated travel industry fund managed by Landsbréf hf., a subsidiary of the Bank, has invested in many exciting ventures related to tourism.

Strong supporter of companies in both town and country

Both 2017 and 2018 were rather challenging operating years for Icelandic fisheries and seafood. The most generally cited influencers are a strong ISK exchange rate, high fishing fees and rising wage expenses. Companies have responded with increased investment and continued consolidation

Investments have led to borrowing, leading to a growing stake in fisheries and seafood by Landsbankinn in 2018. This was achieved both through increased lending to current customers as well as through the addition of new customers, which is a pleasant development. Landsbankinn's market share remains strong and its competitive position has improved with lower financing cost and greater operating efficiencies. The outlook in fisheries and seafood is good as the ISK has depreciated, fishing fees decreased and main fishing stocks are strong.

Landsbankinn remains a strong backer of Icelandic agriculture. There have been considerable developments in the past 1-2 years, especially in the dairy sector, where producers have grown fewer and dairy farms grown larger. Landsbankinn has contributed to these developments by supporting its customers to make changes.